IRIA News

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Germany has finalized a $2.3 billion agreement with Israeli defense contractor Rafael Advanced Defense Systems to purchase Spike anti-tank missiles, marking one of the largest defense contracts between Europe and Israel in recent years.

The deal, signed through the NATO Support and Procurement Agency (NSPA), underscores Berlin’s continued reliance on Israeli military technology despite mounting political tensions over Israel’s war in Gaza.

The contract will be carried out through EuroSpike GmbH, a Bavaria-based joint venture owned by Rafael (20%), and German defense firms Rheinmetall Electronics and Diehl Defense (40% each). Under the agreement, EuroSpike will oversee production, maintenance, training, system integration, and logistical support for the German Armed Forces.

Strategic Partnership and Production in Europe

Most of the Spike missile production will take place in Europe, allowing Rafael to circumvent the political constraints and export restrictions tied to Israel’s ongoing conflict in Gaza. While the deal’s official export figures include only Rafael’s share of the revenue, most of the manufacturing process will be executed on German soil.

“Rafael’s relationship with Rheinmetall and Diehl is amazing, and has proven itself,” a senior defense official told media reporters. “Portraying the deals as German as part of Eurospike is a smart move by Rafael, which has resulted in Spike becoming NATO’s unofficial missile and the most sought-after missile in the world.”

Rafael’s partnership model has allowed it to position its products within NATO frameworks by leveraging European collaboration. “There is geopolitics that affects the ability to sell and the need for local solutions, when it has the advantage of not being known as an Israeli company,” said Rafael EVP Tzvi Marmor, who oversees the company’s Land and Naval Systems Division.

Spike Anti-Tank Missile System

The Spike missile system is used by more than 40 countries worldwide. It is known for its versatility and advanced targeting systems. The family of Spike missiles includes a range of models designed for multiple platforms, from shoulder-fired systems to long-range precision missiles launched from vehicles, aircraft, or naval platforms.

The lightest version, Spike SR (Tact), weighs around 10 kilograms and can strike targets up to 2 kilometers away. At the high end is the Spike NLOS (Tammuz), which weighs about 71 kilograms and has a range of up to 32 kilometers, capable of being launched from land, air, or sea.

Among NATO members, the most in-demand variants are the Spike LR and Spike LR2, with ranges of 4 kilometers and up to 5.5 kilometers from the ground (and up to 10 kilometers from the air), respectively. The system’s proven reliability and modular design have made it a preferred choice for multiple European armies, including Poland, the Netherlands, and now Germany.

Diplomatic Tensions and Strategic Continuity

The signing of the Spike deal comes months after German Chancellor Friedrich Merz announced restrictions on defense exports that could be linked to Israel’s military operations in Gaza. Despite this, procurement of Israeli-origin systems through European partnerships has continued under NATO mechanisms, highlighting Berlin’s balancing act between political caution and strategic necessity.

According to NATO procurement data, the Spike contract represents one of the largest missile acquisitions in the alliance’s recent history, signaling Berlin’s growing confidence in Israeli-designed systems. In 2025 alone, the German Armed Forces spent approximately $365 million on Israeli defense equipment, excluding the new Spike order.

Other major deals include the procurement of Heron drones from Israel Aerospace Industries (IAI) and Elbit Systems equipment for Germany’s A400M transport aircraft and PULS rocket launchers. These purchases follow Germany’s earlier $3.5 billion acquisition of the Arrow 3 missile defense system in 2023, a move that strengthened Berlin’s strategic partnership with Israel amid increasing security concerns in Europe.

Cross-Continental Defense Cooperation

For Israel, the EuroSpike arrangement has become a model of how to expand international defense cooperation while navigating political and regulatory challenges. By embedding production within Europe and forming joint ventures with leading EU defense companies, Rafael has effectively transformed its missile program into a NATO-integrated asset.

“This is a model of how an Israeli company should operate,” a senior Israeli defense official noted, “by joining forces with European players.” The collaboration also underscores Europe’s growing interest in Israeli precision-guided weaponry as regional threats evolve. Germany’s investment reflects not only a strategic military need but also a broader effort to diversify supply chains and reduce reliance on U.S.-made systems.

The new contract positions Germany as one of the largest European operators of Spike missiles and further cements the system’s role within NATO’s standard defense inventory. It also highlights a shifting defense landscape in which geopolitical pragmatism often overrides political frictions.

While Berlin continues to face diplomatic scrutiny over its cooperation with Israel amid the Gaza conflict, the scale of its recent procurements and the institutional cover provided by EuroSpike and NATO frameworks suggest that defense pragmatism remains a driving force behind Germany’s policy decisions.

As Europe rethinks its defense architecture and strives for greater autonomy, the $2.3 billion Spike missile deal stands as a testament to the enduring appeal and strategic adaptability of Israeli defense technology in an increasingly complex global environment.